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The United States wants to reduce its defence industry’s dependence on Chinese rare earths. A proposed facility at Tooele Army Depot in Utah would process metals needed for advanced weapons systems. Financing, permits and a binding land lease remain outstanding.
Retired US General Jack Keane warns that China could use this dependence as political leverage. His comments appeared in a press release from REalloys, where he serves on the board.
On 3 November, the company and the US Army announced a preliminary agreement for a facility to process dysprosium and terbium, among other materials. These metals are used in heat-resistant permanent magnets for defence applications.
Export controls create uncertainty
China introduced export controls on several rare earth elements in April 2025 and announced broader restrictions in October. The later measures were suspended following negotiations with Washington.
The suspension has now been extended until 10 January 2027, Reuters reports, leaving uncertainty over future supplies to Western industry.
Stricter requirements from January
US defence procurement rules for certain magnets will tighten on 1 January 2027. Restrictions will extend across the entire supply chain, from mining to finished magnets, for samarium-cobalt and neodymium-iron-boron magnets.
The rules restrict materials sourced from China, Russia, North Korea and Iran. Exceptions apply, however, so the provisions do not constitute a blanket ban on every magnet containing materials from those countries.
Long-term plans await a binding lease
The Tooele project covers approximately 81 hectares. The proposed lease would run for 50 years, with an option to extend it by another 25 years. The Army would have the right to be offered the facility’s output first, without any obligation to purchase it.
The preliminary agreement is largely non-binding. Environmental reviews, permits, financing and final approvals are required before a definitive lease can be signed. No firm production start date has been announced.
Sources: REalloys, the US Defence Federal Acquisition Regulation Supplement (DFARS), Reuters and Josh Owens/Oilprice.